EU Pay Transparency Guidance Leaves Key Questions Open
New European Commission guidance on the Pay Transparency Directive clarifies the scope of covered employers and pay, but leaves significant ambiguity around determining work of equal value.
The European Commission has issued new guidance on the EU Pay Transparency Directive (2023/970), clarifying some obligations for employers but leaving other key areas unresolved. The guidance, presented as FAQs, confirms the directive's broad application to both public and private sector employers and specifies that initial pay information must be disclosed before a job interview, though not necessarily in the public job posting. It also provides a framework for what counts as "pay" and addresses the directive's interplay with GDPR, designating equal pay compliance a "public interest" that can justify data processing.
Sophisticated counsel should note the significant remaining ambiguities. The guidance does not elaborate on what additional gender-neutral factors might be permissible when determining work of "equal value" and cautions against relying on "market conditions" to justify pay differences without explaining how that factor might be applied permissibly. This leaves multinational employers with considerable uncertainty as they prepare for compliance. The next step is to watch how individual EU member states resolve these open questions as they transpose the directive into national law, with some already indicating they may impose stricter rules.